This is the complete version of the column that appeared in print on Feb. 7, 2005.
Variety’s conversation with Casey Wasserman, chairman-CEO of Wasserman Media Group, concludes with a conversation about his complementary sports and entertainment management, marketing and content enterprise.
WMG and DIC EntertainmentDIC Entertainment recently announced a Formula 1 deal with CBS TV. How do pacts like this one, with its medley of action sports, talent, branding and content, fit into the modern leisure industry? What are the mechanics of working in the realm? From his Westside offices, Wasserman weighed in.
Q: The Wasserman Media Group includes at least five distinct businesses. What’s your role? How do you budget your time among them? And what’s the key to operating multiple enterprises simultaneously?
A: We’ve certainly gotten to where we are today through a series of acquisitions. I think in 2005 those company names will start to retreat. WMG will be viewed as more of an operating entity as opposed to a holding entity for various businesses that divide nicely into units that operate well.
My job as CEO is threefold. One, to set the overall direction in which the company moves. Two, to create a positive culture in which people work. And three, to enable the people here — who, frankly, are better at their jobs than I am — to be successful.
If I do those three things, and then those people do their jobs, WMG should be very successful going forward. But my nature is to try to provide the environment and all the resources for everybody to be successful.
Q: How preemptive is your involvement? Do the bosses have to come to you first?
A: I feel as though I have my finger on the daily pulse of every business unit, which allows me to stay up-to-date with opportunities and issues with each of them. We’ve got great operationally-minded financial, business and legal people, who will get involved where they can help and allow me to be helpful in other ways. Where we all need to get involved together to help fix a problem or with a unique opportunity, we do.
Q: Have you ever decided to staff up in anticipation of business?
A: We bought 411 Productions last year and didn’t, frankly, buy it for what it was, but for what we can execute in a new business. We plan to turn the action sports video business into a traditional studio model. That required senior operations, distribution and production people before the business, in a revenue sense, warranted it.
Q: What’s an example of your staffing to meet demand?
A: On the sales side, through our success with naming rights in the U.S., we broke ground in size and scope with some of the naming rights transactions. We’re generating a lot of business development opportunities for which we will now staff up. We want to hire the very best people. The timing depends on each business.
Q: How impacted is your company by the general economy?
A: We’re certainly not recession-proof. We depend on consumers for a lot of our revenue, whether it’s directly in concert tickets or DVD sales or indirectly in terms of their buying a product that sponsors one of our athletes or stadiums. We’ve been fortunate to be in spaces that are unique and, therefore, a little bit resistant to a recession and other economic issues. I spend a fair portion of my time thinking about the currencies overseas, because we’ve got a lot of business in Europe; and the dollar today affects our daily decisions on where we’re keeping and allocating dollars, hedging and matters that every business deals with constantly.
Q: You own ventures such as arena football’s Los Angeles Avengers and Studio 411 that produces, distributes and markets action sports content. Do you think action sports are the future of athletics?
A: Kids today are very independent in how they operate, in how they participate and how they think. That has generated the growth of action sports such as the Arena Football League. At the same time, you’ve had a huge renaissance of baseball. So you’ve got this mixed message.
Traditional team sports will never go away. They may change. Their demographics will clearly change. But young kids have grown up in a very different way than I [age: 30] or my sister, who’s in her late 30s, than my mom. In this day and age of instant messaging, iPods and the like, kids want to be in control and be independent. Action sports and related businesses fit very nicely with that mindset.
Q: WMG has negotiated television rights, naming of stadiums, jersey sponsorships and other types of marketing. What do you believe will be the continued connection to advertising? Is it going to be overt or a little more subtle? Symbiotic? Or parasitic?
A: Sponsored entertainment is already branded in action sports. You can’t go to a basketball or hockey game without seeing commercialism embedded in the programming. You can’t fast forward through it because it’s on the sidelines, it’s on the jerseys, it’s in the stands. The first-down marker is sponsored by someone that’s virtual now. Soccer is the biggest sport in the world, no question, on a global basis. Most people don’t even know that the soccer or “football” clubs have team nicknames, as ours do.
Everybody knows that the New York team is the Giants; San Francisco is the 49’ers. Very few people know that Manchester United is the Red Devils. People don’t know what Arsenal’s nickname is, because they’ve got a corporate logo on their jersey that is far larger in every measurement than their team logo. Their team logo literally doesn’t even have their nickname on it.
The revenue generated from the corporate logo on their jerseys far outweighs any revenue generated from a similar corporate sponsorship opportunity here.
We represent a soccer club in Italy called Juventus — probably one of the two or three most powerful soccer clubs in the world on and off the field. We’re in the process of doing a shirt sponsorship now as well as their new stadium renovation. The shirt sponsorship revenue is e18½ million ($23.8 million) per year!
I think that sports will continue to grow in importance in the ever-evolving technological world, because not only is it live, but there’s movement towards integrated advertiser-supported environments, as opposed to those that are traditional, commercial inventory-supported.
Not changing any paradigms — it’s accepted and already occurring in sports all over the world. And that’s going to continue to push the envelope for sports in terms of opportunities.
Q: How do the major advertising agencies view the Wasserman Media Group? As a competitor?
A: Our goal in the future is for them to look at us as the representative of, or owner of, the highest-quality opportunities in the worlds we operate in. And, therefore, it would be a highly valuable business relationship.
Q: Would you ever consider integrating WMG with a large advertising agency?
A: No, I would say it’s highly unlikely. The two concepts we don’t talk about here are exit strategies or synergy. Synergy has come to mean forced interaction.
If we do our job right, if I do my job right and get the right businesses here with the right people operating as best I can, they will work together. And if I do a poor job of putting businesses together with poor people at the top, they will never work together no matter how much I force them to. So synergy is not a concept I worry about because it’s a byproduct of doing my job right.
Q: Increasingly, we see traditional entertainment executives migrating to sports and vice versa. What’s the reason for this?
A: [Laughs] If for no other reason, everybody in the entertainment industry thinks sports are cool, and everybody in sports thinks the entertainment industry is cooler. But having said that, I think what you’re seeing is the disintegration of the line between sports and entertainment. We’ve chosen a name, Wasserman Media Group, that captured all the businesses we were in. It’s not just sports, it’s not just entertainment, it’s not just music. It’s media — media in the broadest sense of the word. There are a lot of really talented sports executives and entertainment executives who are moving toward interesting opportunities.
Q: What are the advantages and disadvantages of being born into a prominent entertainment family?
A: My first venture into the world of sports was to buy an arena football team at the age of 24. My being Lew Wasserman’s grandson allowed me the opportunity to make that decision. It stopped there. I wanted to do something where I would be judged on my own success or failure. Either was OK so long as it was based on what I did, not on what somebody perceives somebody else helped me to do.
Being Lew Wasserman’s grandson didn’t help me sell a single season ticket. It didn’t help me sign a single football player. It didn’t help me build any of the business that we’ve got here. Having said that, to me, there are no disadvantages.
If I had worked in the entertainment industry, I’m convinced that anything I would have done would have been followed by a qualifier.
“A Wasserman did this, but he’s Lew Wasserman’s grandson and … .” You don’t read about that any more with me. There’s nobody I’m more proud of than my family. Having said that, I wanted to be my own person in business and be respected — or not respected — but it would have been something I had earned and deserved.
Q: So you are blazing new trails.
A: My family’s important to me because they’re my family. They’ve supported me. They’ve been a part of my life since I was born, obviously, and been the support and friendship mechanism, from my sister to my mom to my grandparents. They’ve been as nurturing and wonderful in that as anybody could ever hope for.
The rest was an incredible opportunity to see the world through my grandfather’s life, which was unique, clearly. I could never associate a disadvantage with family.
Q: How did your grandfather deal with you when you made mistakes? Do you handle your subordinates in a similar manner?
A: The thing that was important to him — with anybody, including me — was: If you make a mistake, be honest about it upfront. Be quick to recognize it and be quick to react to it.
Our No. 1 rule at WMG is “No surprises.” Good, bad or ugly: no surprises. We spend most of the time anticipating, preparing for and reacting to anything that may go wrong. Every single day in every business in the world, something goes wrong. The people who are successful are the ones who are better at dealing with it.
Q: What’s your tolerance for failure?
A: Certainly, it depends on the conditions which created any problem. If it were a well-thought-out, well-designed, well-executed plan that didn’t resonate for some reason, that’s almost unavoidable. I have little tolerance for poor execution because that’s something we should be good at. If it were a bad idea that was well-executed, then maybe we all made a mistake in the idea.
But the most important thing for us is to recognize that something’s not working and to react to either correct or end it as quickly as possible. That is a daily theme and a daily occurrence here.
Q: Are there any business transgressions that you consider unforgivable?
A. Dishonesty and a lack of loyalty are by far the two which are totally unacceptable. If you want to look at my grandfather’s career, and pick a word, loyalty might be the most common theme in terms of how he dealt with employees. The stability that it created enabled a lot of the success that occurred at MCA. Those employees were fiercely loyal to him and vice versa. I think that was abundantly clear to everybody included in a pretty unique environment in an industry where that was not the norm.
Q: For those who don’t have the benefit of an extraordinary individual as a mentor, how might they go about seeking one?
A: When I bought the Avengers, the first thing I did was to call every owner or president of every sports team in L.A. to go to lunch, because they were doing it and knew a lot more about it. People in positions of success usually had mentors in their lives and are often receptive to young people who want that opportunity. So whether it’s an email, in this day and age, or a fax or a phone call, most people are willing to help those who seek that help. I think the more proactive someone is the better the results are going to be.
Q: Now that you’ve moved into your 30s and you’re seeing another generation of business executives come into the workforce, have you become a mentor to others?
A: Certainly, within our organization and some outside, I’ve tried to provide that. While I don’t have the wealth of experience that many people do, I have some unique life experiences and some business experience. To the extent I can, I try to provide opportunities and to help people with their careers and their futures inside WMG. It’s rewarding to be able to help someone and see them grow over the course of a few years or hopefully longer, through any leadership I can provide to them.
Q: The Boston Red Sox finally won the World Series with a general manager whose first name seemed to be “Young Theo” Epstein. To what extent does age matter in the sports and entertainment business?
A: The only thing a young person doesn’t have is the experience base from which to make informed decisions. Everything else — intelligence, aggressiveness, intuition, innovation, energy — all those things young people have, frankly, maybe more than some others. You can’t buy, and you can’t learn, experience in a textbook. The only way to fill in those gaps is do it every day.
When I don’t know, I pick up the phone and call 10 people whose opinions I value and ask for their advice. The thing I think about every day with regard to my grandfather is the tremendous amount of experience and, therefore, the wisdom it created inside of him, which I was fortunate enough to have imparted to me.
To be able to pick up the phone and call someone who had that incredible history of unique experiences to draw from was special. As Theo Epstein learned, he never knew how to do what he did until he did it. And I never knew how to do what I did until I did it.
Q: As time has passed, has your estimation of the entertainment conglomerate heads increased or decreased as you’ve gotten to know them, observe them and work with them?
A: As for the entertainment heads I know and interact with, as infrequently as that may be, I’m extremely impressed and, frankly, inspired by what they do. I think about operating our, relatively speaking, little business on a daily basis with all its complexities.
Then I think about people like Peter Chernin or Barry Meyer or Jeffrey Katzenberg and the enormity of decisions they make on a daily basis, and I’m always amazed by that.
I think one of the misconceptions young people have about successful people is that everything goes right. You hear about these great, successful transactions because that’s what the press writes about.
You never hear about the hundred thousand things that go wrong every day that they’re really good at dealing with. And the amount of respect I have for those people who deal with all those things, every day, in hundreds of different businesses all over the world is, to me, an incredible skill set that I don’t have today, that I work every day to develop, that they have and that’s why they’re successful.
Q: It’s like when you’re watching a golf tournament. What’s on television are the top three or four players. What about the other 40 who are in the field, shooting 82?
A: What about Tiger Woods, who shoots five under but only shot five under because he was able to save 15 bad shots? Not because of the four good shots he hit. Golf is a little different. You’re not really dependent on anybody else, and you’re not at the whim of some other things.
If Tiger Woods hits 13 out of 18 greens in regulation, he’s having a stellar day. A bad day is eight out of 18. That means over 50% of the time, he’s not where he should be. Yet he’s still the best golfer in the world — or second best. V.J. Singh is not in the middle of the fairway, 300 yards down the course every single time. No way. V.J. — he’s far left, he’s way right.
But us hackers are the ones who try to swing for the fences when we get in that position. He knows how to manage a golf course and a golf game, and that’s why he’s at the top of his game in the world. You think about the number of decisions any top executive makes on a daily basis, it’s staggering. They’re never going to be right 100% of the time, but it’s how they deal with the times that they’re not right.
Q: Football coaches are known for working such long hours that they often sleep on cots in their offices or in the lobby. Should the rest of us follow that model?
A: In today’s age an NFL head is the CEO of a very dynamic and complex organization. The reason they sleep in their offices is because no amount of preparation is enough. My grandfather, in his attempt to help raise me, was never one to say, “Do this. Don’t do that.” As you know, Q, he taught much through stories, and you were supposed to draw your own lessons from those stories. Above all others the one word he always said to me was “anticipation.”
Anticipation requires thinking about all the angles. If you’re a football coach, you watch games all week so you’re prepared both to attack and defend every opportunity in every situation. The guys who are better prepared and, therefore, get their players better prepared for all situations, are the ones who win.
To me that’s probably the best business lesson that you can have. Today those coaches are Bill Ballecheck, and Andy Reid and Bill Collar and Bill Parcells and John Gruden, and historically Joe Gibbs and Bill Walsh.
If you read Bill Walsh’s book about football and being a football coach, that’s not a football book; that’s a business book. And, frankly, it’s a life book. Being prepared and anticipating allows you to avoid a lot of things that were avoidable and be prepared for a lot of things that may not be avoidable.
Q: John Wooden’s book is also clearly along those lines. In Hollywood, was the studio system or the current free agent system better for talent and other employees?
A: I don’t think there’s any doubt if you’re talent, you’re better off today than you were 50 years ago, from a financial perspective. However, I think the escalating costs of films and everything associated with making a film create a whole chain reaction of decisions that may or may not be good for the movie business. The creative risk is that you may not find the next “E.T.” or “Schindler’s List” because of the cost.
If you’re spending $150 million, it’s hard to argue with playing for the averages. But the entertainment business was built on creativity and creative types who were thinking outside the box. It’s become a copycat industry where people are not necessarily rewarded for taking risks. I’m not sure that’s the best thing for the long-term health of the business.
Q: Does anything bother you about the sports industry?
A: For athletes to think that they’re not role models is kind of disturbing. It’s disingenuous from my perspective that an athlete can take all these millions of dollars from sponsors and from teams, that are frankly only supported because there are fans in the stadiums and fans at home watching on TV, and then somehow say that they’re not role models. If they don’t want to be role models they should work in a factory, and they can be a role model on a different scale.
Q: Is it possible to accumulate too much power? Or is that the sound of one hand clapping?
A: The guys who are powerful aren’t powerful because they have power. They’re powerful because of the way they operate. And my grandfather didn’t work every day of the year so that he could end up No. 1 on the 100 most powerful people in Hollywood list.
He worked every day because he was doing the things he believed in for his business, and he ended up No. 1 on that list.
I’m sure Rupert Murdoch is the same. He’s all over the globe, building an incredible business in News Corp. because that’s what he believes in. I don’t know him very well, but he’s clearly shown a respect for the business and a vision for the business that has taken him to great heights.
As long as people remain true to what their daily goals are and not worry about the results of those daily goals, I think that the power is a byproduct of a lot of other things.
Q: Finally, what would you like WMG to look like in five years or 10 years?
A: It’s funny. After my grandfather passed away I was going through some of his old papers, and I found a letter he wrote to Jules Stein about taking MCA public. And one of the things he said was, “I don’t feel comfortable going public, because I’m not good at predicting the future and I’m not good at making excuses.”
So in the spirit of my grandfather, I’m not very good at predicting the future, and I’m definitely not good at making excuses. So …
Q: But he went public.
A: They did go public. But in this day and age of earnings forecasts and excuses for earnings forecasts, I’m not so sure he would have been thrilled to be public.
But all we’re going to do every day at WMG is try to operate these businesses to the best of our ability and take advantage of opportunities that fit within how we see the world. In 10 years I hope we’re still here and doing well.